US REIT discounts to Net Asset Values partially reversed their Q4’23 contraction in Q1’24 with the sequential declines most pronounced in the shopping center and industrial sectors. View the chart book to learn more: https://okt.to/rIZqvk
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Vice President I Office & Health Care Services Division and Investment Sales I Colliers International
Traditionally, appraisal-based cap rates have been the preferred method to value properties. However, under current conditions, that sort of estimate is harder to pin down with enough accuracy. Here are some alternative approaches to cap rates and property valuations: - Spread-Implied Cap Rate — take the average historical spread of cap rates over 10-year Treasury yields to find the current property yield. - Fair Value Cap Rate — use the Gordon Growth model by adding the risk-free rate and risk premium and then subtract expected income growth. - Debt Service Coverage Ratio (DSCR) Implied Cap Rate — look for the yield that will allow the property to get an adequate DSCR. - REIT-Implied Cap Rate — compare current REIT share prices and a property’s expected income. #multifamily #colliersinternational #valuations
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From March 2023 to March 2024, rates drop from $1.48 to $1.20, marking an 18% YoY decrease, continuing the trend of REIT facilities lowering asking rates to control prices in the market. Read the full report below👇 https://urt.io/march-recap #selfstorage #selfstorageinvesting #selfstorageindustry
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In today's edition of 'fact facts' about REITs: The sector posted its 5th best monthly returns ever in Nov '23 at 11.86%. Listed REIT returns have never been down over the next-twelve-months when analyzing the 4 prior best months (April '09, Dec '08, Oct. '11 and Aug '09). The average next-twelve-month return for the top 50 months ever is +12.9% and the median NTM return is +15.5%. Next-twelve-month returns have been positive 41 out of the 50 months, or 82% of the time.
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Lenders and investors are mulling the outlook for interest rates following the Fed’s decision to leave them unchanged in January. Our new white paper includes a rate forecast and five other huge trends likely to drive residential market activity in 2024. Download it free here: https://lnkd.in/gPVVsqgD #RealEstateMarketForecast #ResidentialRealEstate #MortgageMarket #MortgageLending #HousingMarketTrends
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The 10-year Treasury yield notably displayed significant movements throughout 2023. Specifically, it was largely range-bound over the summer (between 3.5%–3.8%), then shot up to around 5.0% in October before falling back down to under 4.0% before year-end. It currently hovers slightly above 4.1%. Thanks in large part to these movements in yields, the #realestatemarket seized up and very few transactions occurred in the fourth quarter of last year. As a result, the full calendar year of 2023 exhibited the lowest transaction volume in the last five years. Read on in our #chartoftheweek by Griffin Gildea at the link below.
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Yes, I know cap rates “matter” but they haven’t seemed to recently and in many cases they simply don’t make sense. I’ve said before, the only properties trading right now are “trophies and trash”. https://lnkd.in/esRbrqwf The “trophies” in many cases are trading with negative leverage I guess with the hope that there is additional NOI to be unlocked over time, although that’s going to be difficult in the near term. Or, is there just still too much liquidity in the market and no place to put it? The “trash” is searching for price discovery and it’s too early to know what the bottom looks like. The question remains, how closely are cap rates correlated with treasury rates? Over time they are but it’s not a perfect correlation as we’ve seen over the past year as rates have adjusted but cap rates really haven’t by large. CRE is slow moving ship and there hasn’t been enough transactions for prices to adjust. Cap rates will have to go up at some point unless interest rates drop again before that happens. I think that scenario is unlikely. #caprates #cre #commercialrealestate #propertyvalues #bankerwithsign
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Last week's market movements in 7 minutes...https://ow.ly/2OaV50S8aAB 📈Markets drifted at the start of the week following holidays in the UK and US, as investors awaited Friday’s news on whether consumer prices in the US and eurozone were now going up slowly enough to keep interest rate cut hopes alive. 🏠 Thinking of selling your second property? Cashing in a share portfolio? When you sell an asset that’s gone up in value since you bought it, you may have to pay Capital Gains Tax (CGT) on your profits.
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Welcome to the October 2023 #newsletter. We look at September’s significant downturn in share prices which happened alongside further strengthening in the residential property market, while interest rates remained unchanged. #interestrates #independentfinancialadvice
newsletter-october-2023.pdf
janeclarkfinancialmanagement.com.au
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https://lnkd.in/gAjJyces Some welcoming news for the world of M&A as we go into 2024. Although the interest rates remain high, the absence of further hikes provides the type of stability that can give buyers a better understanding of deal expenses and as a result allow for more calculated deal-making.
Federal Reserve keeps key interest rate unchanged and foresees 3 rate cuts next year
apnews.com
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The lower auction yield came after the benchmark 10-year US Treasury yield corrected to 2-week lows at 3.79 percent from July 7's 4.09 percent amid market expectations of a 0.25 percent Fed rate hike on July 26. This is also amid recent hawkish signals recently on possible local policy rate hike or no local policy rate hike. https://lnkd.in/g3Diyma5
BTr fully awards re-issued T-bonds
pna.gov.ph
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